Finding and buying a home can be an exciting time, but before you sign the contract you’ll need to have your down payment and mortgage in order and ready. When it comes to choosing your mortgage, it’s important to keep in mind that there are several mortgage payment options and home loan types in Toronto to choose from. It’s important that you assess each option and review the pros and cons of each as well as choose the best option for your budget. You’ll need to determine how much you can actually afford each month, including the cost of insurance and taxes. A good tip to remember is to borrow as little as possible, which will prevent you from getting buried under your mortgage. Here are

some of your options when it comes to payments and home loans in Toronto.

Home Loan Types in Toronto

There are several mortgage options for homebuyers in Toronto, including a fixed-rate mortgage or an

adjustable-rate mortgage as well as an interest-only mortgage.

Fixed-rate mortgage:

This is the most common and typically the best option for homebuyers. This type of mortgage locks in your interest rate and payment for the life of your loan, which means your interest rates cannot increase, so your mortgage payments can’t expectedly go up.

Adjustable-rate mortgage: This type of mortgage means your interest rates can be periodically adjusted according to the changes in current rates. This also means your payment amount can change, so it’s important to keep in mind that should you choose an adjustable-rate mortgage, although your payments may decrease, they can also easily be increased, sometimes unexpectedly.

Interest-only mortgage: 

An interest-only mortgage means you pay only the interest on the loan for a specified amount of time, which is typically 5-7 years. After the interest-only term is complete, you can choose to refinance your loan or begin paying the principal balance. It’s important to note that if the rates rise, you can expect to have a higher monthly payment even if you refinance your loan for another interest-only loan.

Mortgage Payment Options:

During the mortgage process, you’ll have to decide which payment option is the best for your needs. The option chosen will determine the amount you’ll pay and how often you will pay it. There are usually

5 payment options to choose from:

Monthly-This is the most common option. Monthly payments means that you will be required to have your mortgage payment paid to the lender on the same day each month, so you will make 12 equal payments to your mortgage each year.

Weekly payments:

Weekly payments can either be mailed or taken directly from your bank account every week-52 weeks a year. The amount of the weekly payments is calculated by dividing the yearly mortgage payment by 52.

Bi-weekly payments: This payment option means you will make a payment to the mortgage

lender every two weeks, so the payment amount is found by dividing the yearly mortgage

payment by 26.

Accelerated bi-weekly payments:

This type of payment allows you to pay the mortgage off quicker, so you’ll save on interest. The way this works is instead of payment amounts being the expected amount for a bi-weekly payment, you will pay half the monthly mortgage payment every two weeks.

Accelerated weekly payments: This is similar to the accelerated bi-weekly payment, except you divide by 4 (the weekly payment) and multiply by 52, so you will be making weekly payments instead of bi-weekly payments.

Reviewing mortgage payment options and home loan types in Toronto can be overwhelming, so it’s

important that you discuss your options and financial situation with a mortgage professional. Discussing

your options with a professional will allow you to find the best option for your specific needs and


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